Week Six

Week Five

Week Four

Week Three

Week Two

In this weeks reading I found the information surrounding financial incentives to be the most interesting. As someone who works in a department where financial invectives run the show, I was excited to learn the in and outs of their actual effectiveness.

A. According to The Business Dictionary, a financial incentive is a monetary benefit offered to consumers, employees, and organizations to encourage behavior or actions which otherwise would not take place. As financial inceptive motivates action which otherwise might not occur without the monetary benefit. An example of a financial incentive could be a manager rewarding a department with a higher commission rate for exceeding x amount of sales.  In this case, the sales person may be more motivated to sell because by exceeding x, he or she will reap the benefits of their additional hard work through a greater financial reward.

B. The concept of financial incentives are important to each and every one of us in the MBA program as current or future, employees and or managers. It is invaluable to know what works and what doesn’t and based off of the evidence based research in our text- financial incentives can and do work but only in certain situations under certain executions.That being said, the text refers to three avenues in which incentives can enhance organizational performance if well designed and applied. See below:

1.Financial incentives can motivate more effort, a motivational effect.

2. Financial incentives can provide people with information about what the organization values  and what its priorities are, an informational effect.

3. Financial incentives can presumably attract the right kind of people and repel the wrong kind, a selection effect.

C. The three types of effects listed above that could come from the offerings of financial incentives have me considering them in a very new light. Over all, however, I question ideas surrounding motivation. In any case, money motivates. How can it be determined whether or not said motivation comes from interest in bettering the company or ones image as opposed to just trying to "bring home the bacon?" Further, if you are hired to do a job and to meet a job description, should you really be paid additionally for doing the job well? Shouldn't that be the very minimum expectation of us at our work place... that we do the job we were hired to do well?

E. To me, this course has made me realize the importance of being able to sift through research and find the "good stuff." I can't recall which company uses the slogan, "if it's on the internet, it must be true!" but growing up as a millennial, this really seemed to be the general belief. Reading the course text has really opened my eyes to another way of approaching research and other studies. I am looking forward to continuing to learn more ways and approaches to making sound decisions. 

Sources:

http://www.businessdictionary.com/definition/financial-incentive.html

Pfeffer, J., & Sutton, R. I. (2006). Hard facts, dangerous half-truths, and total nonsense: Profiting from evidence-based management. Boston, Mass: Harvard Business School Press

Week One

Like many, I had never heard of evidence-based management prior to this weeks session. EBM is using data, facts, and verification as a basis for decision-making. Those who are in favor of this approach believe that by considering sound evidence, unnecessary damage to employee well-being and group performance can be avoided. Research considers the issue of incentive pay as an example. In a recent New York Times article, this is detailed. 

           

“Many people believe that paying for performance will work in virtually any organization, so it is used again and again to solve problems — even where evidence shows it is ineffective.Recently, New York City decided to end a teacher bonus program after three years and $56 million. As The New York Times reported in July that a study   found that the effort to link incentive pay to student performance “had no positive effect on either student performance or teachers’ attitudes.”But that bad news could have been predicted long before spending all that time and money. After all, the failure of similar efforts to improve school performance has been documented for decades.”

This is an example of a positive implication that EBM would have on management. By utilizing EBM, the manager would realize that the documented failure of incentive pay would render it useless. This would lead said manager to consider different types of employee incentives that have been found to work in other research. 

As someone who has spent her working career in various corporate offices, I was initially attracted by this approach. Shortly after reading the text however, I am singing a different tune. In the class text, Pfeffer and Sutton use evidence based medicine in order to demonstrate the EBM movement.  

P & F write,

“ Other reasons that many doctors don’t use the best evidence remind us of why managers might not either: they rust their clinical experience more than research, there is too much evidence for any person to absorb, and those who try to keep up with the advances in knowledge often aren’t trained to distinguish strong research from weak. Plus, doctors face an endless supply of vendor who muddy the waters by exaggerating the benefits and downplaying the risk of using their products.” (Page 13)

To further this point, the text goes on to explain that there are obviously physicians who critique such an approach- the idea that Doctors will replace their clinical judgment with search engines. Like those who find issue in the EB approached, I agree greatly. Though I find it to be invaluable for doctors/managers/etc. to stay informed of the happenings in their field as far as research is concerned, I do not believe that it is possibly to place all faith in any on opinion. Other classmates have touched on the idea of credibility, which is valid point. Beyond this, the idea that all managers or all Doctors could or ever would be exposed to the same set of research and obtain the same knowledge. This is seemingly impossible, as is the idea that each of these professionals could ever ignore past clinical or professional experience to utilize EBM instead. 

Sources:

Pfeffer, J., & Sutton, R. I. (2006). Hard facts, dangerous half-truths, and total nonsense: Profiting from evidence-based management. Boston, Mass: Harvard Business School Press.

http://www.nytimes.com/2011/09/04/jobs/04pre.html?_r=0

Welcome!

Edye Pucciarelli

Organizational Behavior

Summer Session Two